Telecom Sector Seeks Industrial Electricity Tariffs in Pakis

Pakistan's telecom operators are urging the government to reduce electricity costs by shifting from commercial to industrial tariffs, warning that high energy prices could discourage investment in 5G networks and AI data centres. A plea for industrial tariffs for the telecom sector raises the spectre of powering AI A number of CEOs of telecom operators have written to the Prime Minister asking that their sectors be given industrial electricity connections rather than commercial, as at present the commercial tariff is around Rs 45 per unit, while the industrial is about Rs 33 per unit. Clearly, this would make a big difference. However, the letter raises the question of Artificial Intelligence-related data centres. THey are mentioned along with 5G network s in which investment could be driven away if the tariff was not revised. The letter also mentions how the telephone companies are switching to solar power. This provides another example of how high tariffs are driving consumers off the grid. The letter contains two unspoken threats. First, telcos might go away from the grid if battery storage becomes feasible at scale. Second, data centres might only open if they had access to solar or wind power, whether direct or supplied through batteries. The telcos make a persuasive case. After all, they are recognized as an industry by the Income Tax Ordinance and thus are subject to it accordingly. The National Cellular Policy 2004, followed by the Pakistan Telecommunications Industry notification by the Industries Ministry. If the National Electric Power Regulatory Authority could extend the industrial tariff to the poultry and dairy industries, why not the telecom sector? It should be noted that there are protests in the USA by communities where data centres plan to be sited because of the environmental damage that would be caused by the necessary power plants. Data centres can thus either exploit existing power sources or should opt for renewable sources, preferably purpose-built. That is where both solarization and battery technology come in. The electricity distribution companies, as well as the anti-solar lobby should understand that power tariffs, driven up for a number of reasons, not least the panicstricken deals with the Independent Power Producers, are driving away what had been a captive consumer base. That base cannot be brought back by suppressing solarization, nut by rationalizing tariffs. The inexorable rise of the Fuel Adjustment Charge, is enough to explain that: the FAC is already at Rs 7.46 per unit, and would reach Rs 10.02 if the Cmtral Power Purchasing Agency-Guarantee proposal of an increase of Rs 2.56 per unit is approved at the NEPRA hearing on October 29. Unless the Middle East crisis is ended, and tariffs brought down, telcos will keep struggling.